The U.S. Federal Communications Commission took the first step Friday toward groundbreaking auctions of television spectrum to mobile carriers faced with skyrocketing bandwidth demands from their customers.

The FCC approved a notice of proposed rulemaking (PDF) (NPRM) that lays out proposed rules and asks for public comment on so-called incentive auctions, in which U.S. television stations would voluntarily give up their spectrum in exchange for proceeds from auctions of that spectrum. The NPRM is the first step in a long process at the FCC, with the agency projecting that auctions to mobile carriers would happen in 2014.

With the FCC moving forward on the world's first incentive auctions, "this is a big deal," FCC Chairman Julius Genachowski said. "The world is watching."

The auctions will involve a complicated three-step process, with television stations offering their spectrum in a reverse auction, the FCC reconfiguring the remaining TV spectrum to gain efficiency, and finally, the FCC auctioning the available spectrum to mobile carriers.

The incentive auctions will address a coming spectrum crunch and will help carriers provide better mobile service, with fewer dropped calls and fewer spinning pinwheels on mobile browsers, Genachowski said.

The auctions would also give the U.S. a "strategic bandwidth advantage," in a global race, he added. "Success will unleash waves of innovation that will go a long way toward determining who leads our global economy in the 21st century."

Concerns raised

The commission's two Republican members raised a number of questions about the proposal, including whether it would leave too much spectrum unsold for unlicensed uses. The proposal would create a nationwide swath of unlicensed spectrum.

In addition, the proposal's cap on the amount of spectrum that one carrier can buy could result in the auction not raising the US$7 billion the U.S. Congress has targeted for a nationwide public safety network, said Republican Commissioner Robert McDowell.

McDowell urged the commission to be open to alternative ideas. "This being literally, as I've said before, the most complex spectrum auction in world history, I think we should keep all our options open," he said.

Julius Genachowski

Genachowski and other commission Democrats defended the unlicensed spectrum plans. WiFi, television remote control devices and garage door openers all use unlicensed spectrum, said Commissioner Jessica Rosenworcel. "Good spectrum policy" has room both licensed and unlicensed spectrum, she said.

"This is a time to be embracing and extending WiFi-like uses of spectrum," Genachowski said. "Unlicensed spectrum has a powerful record of driving innovation, driving investment and economic growth."

Several companies and trade groups praised the FCC for its vote.

The vote is "a big step in the right direction," Mary Brown, director of government affairs for Cisco Systems, said in a statement. "The FCC invented the spectrum auction and perfected it. We have every confidence that the commission will do the same for incentive auctions."

The auction, along with an FCC proposal approved Friday to look at spectrum holding limit policy, will help carries meet "soaring consumer demand for mobile Internet services," Joan Marsh, AT&T's vice president for federal regulatory affairs, wrote in a blog post.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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